Consumers are happy with their credit cards and the benefits they offer, according to the results of a new survey released today by the American Bankers Association.
The survey, conducted for ABA by Morning Consult before the midterm elections, showed that most Americans view the credit card marketplace as highly competitive, and they have concerns about reduced access to credit and other potential harm from policy proposals to cap credit card interest rates.
“Americans view their credit cards as an essential tool to help them navigate daily financial challenges, and they see firsthand the security, choice and convenience that today’s highly competitive marketplace offers,” said Rob Nichols, ABA president and CEO. “Whether it’s fraud protection, financial flexibility or generous rewards programs, the vast majority of consumers recognize and appreciate that their credit card provides very valuable benefits.”
Seventy-seven percent of consumers reported being satisfied with their current credit cards, and 70% said access to a credit card is important for managing household finances. More than two-thirds (67%) said the credit card marketplace is highly competitive and that they have multiple options to choose from when picking a card to best meet their needs.
The leading card benefits consumers identified were fraud and security protection (79%); access to credit in case of emergency (78%); earning rewards (75%); the convenience of not carrying cash (74%); financial flexibility when costs rise (73%); special offers from retailers and brands (69%); help bridging financial gaps between paychecks (66%); and travel benefits (60%).
The survey also gauged consumers’ views on card policy issues. Americans do not want government-imposed price controls on credit cards that restrict access to credit and jeopardize credit card rewards programs, according to the survey’s findings.
Credit card interest rates are not a top economic concern for most Americans, survey findings showed. When asked to pick among several economic issues they would like Congress to prioritize, consumers ranked credit card interest rates near the bottom of the list. Inflation, food and grocery prices, healthcare costs, housing affordability, energy costs, government spending and the deficit, and wages and income growth all ranked well ahead of credit card interest rates as top concerns for consumers.
By nearly a 4-to-1 margin (66% vs. 17%), Americans said a one-size-fits-all credit card interest rate cap ignores that people have different financial situations (vs. only 17% who disagree). By a nearly 2-to-1 margin (55% to 30%) consumers oppose a 10% rate cap if it results in higher annual fees for most cardholders. By a nearly 3-to-1 margin (62% vs. 23%), consumers expressed concern about potential negative impacts on credit scores from account closures or credit line reductions caused by an interest rate cap. By a nearly 5-to-1 margin (70% vs. 15%), consumers said responsible cardholders shouldn’t face higher fees or reduced rewards because of new regulations.
Seventy-five percent of respondents said it is important for Congress to prevent higher annual fees for cardholders (75%) as a result of new regulations, to protect consumers from losing access to credit cards or seeing their credit limits significantly reduced because of new regulations (73%), and to protect people from being pushed toward payday loans or other extremely high-interest lenders as a result of new regulations (73%).
“The survey shows that many consumers recognize the potential harm from a credit card rate cap including reduced access to credit for some of the very people a cap is intended to help,” Nichols said. “Americans are rightly concerned that rate caps would make the affordability challenge worse by limiting the number of people who qualify for credit cards, imposing higher fees for those who do qualify, and forcing more consumers to turn to less regulated, more costly alternatives.”
